Oil prices have remained elevated in recent
weeks as Iran has threatened to block the strait should the West impose
tougher sanctions on its oil industry as part of a standoff over
Tehran's nuclear program.

The
narrow strip of water that separates Oman and Iran is the world's most
important oil shipping lane, which connects the biggest Gulf producers
such as Saudi Arabia, Iran, Iraq and the United Arab Emirates with world markets.

Flows
through the strait are estimated at around 15-17 million barrels per
day (bpd), or just under a fifth of global supplies, and a new pipeline
would bypass it to carry most of the UAE's oil, 1.5 million bpd, to
global markets.

"The pipeline is
almost complete. Hopefully it will be operational within six months, by
May, June," the UAE's oil minister, Mohammed bin Dhaen al-Hamli, told
reporters on the sidelines of an energy conference in Abu Dhabi.